The Concept of Payment: Wire Transfer Orders, the Common Law and article 4A

The immense size of the wire transfer orders that occur in the Eurocurrency market are integral to the operation of the international monetary system. Private international law should ensure the smooth facilitation of such transactions – yet both the common law and statutory provisions enacted in some jurisdictions do not definitively determine nor allocate liability in certain claim-conflict situations. The specific focus of this article is the determination of the point at which a wire transfer order is completed, resulting in the discharge of an underlying debt obligation between a payor and payee. Determining the point at which a payment order is complete is not within the purview of the payor or payee; rather, the internal processes of a beneficiary\u27s bank dictate the time at which a wire transfer order is complete. This requires the payor to rely upon the payee\u27s bank to complete payment and discharge an underlying debt obligation. This article will outline the common law decisions applicable to such transactions, and the statutory provisions of article 4A of the Uniform Commercial Code that attempted to further refine liability. The conclusion of the article is that there is no predictable legal method to determine the point of completion of payment, resulting in payors making wire transfer orders at their own risk